Cities turn to real estate to fund rail projects, paper says

Beijing’s decision to delegate approvals for rail projects to lower-level authorities has unleashed a building frenzy in the sector, with more than 70 rail projects under construction in 28 mainland cities, the 21st Century Business Herald reported Tuesday. And the infrastructure is not coming cheap. The construction costs of subway projects in Zhengzhou, Nanjing and Hefei are coming in at 500 million yuan (US$80.65 million) to 600 million yuan per kilometer, and up to 900 million yuan per kilometer for Shenzhen’s Line 3, the report said. The high costs are forcing more local governments to finance the projects with the sale of land near the railway stations.

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